25 arrested in $500 million Oxycodone scheme

Astramed Physicians clinic's Dr. Robert Terdiman (white shirt, pointing) is pictured in front of the Astramed Physicians clinic in New York, in this July 9, 2013 handout surveillance photo provided by the Office of the Special Narcotics Prosecutor for the City of New York. Terdiman is one of 25 people who were charged with involvement in a massive scheme that flooded New York City's black market with as much as $500 million in painkillers, federal and state officials said on February 5, 2014. REUTERS/Office of the Special Narcotics Prosecutor for the City of New York/Handout

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Marina Lopes, Reuters

Feb 5, 2014

, Last Updated: 10:19 PM ET

NEW YORK - Twenty-five people, including doctors, were charged with involvement in a massive scheme that flooded New York City's black market with as much as $500 million in painkillers, federal and state officials said on Wednesday.

The operation was based at a clinic operating under the name Astramed in the city's Bronx borough, said officials, who described it as a "pill mill." The clinic sold phony prescriptions to drug dealers, who bought 5.5 million oxycodone pills at pharmacies around the city and as far away as Florida, the officials said.

"This is poison by prescription, and the volume and money allegedly involved would make hardened illegal drug traffickers envious," said Manhattan U.S. Attorney Preet Bharara.

Astramed's owner, Dr. Kevin Lowe, collected nearly $12 million in exchange for fake doctor's visits made by phony patients sent in by drug dealers for three years between January 2011 and January 2014, officials said.

Twenty-four of the defendants were charged with conspiracy to distribute and possession with intent to distribute narcotics, according to a federal indictment unsealed on Wednesday.

One of the clinic's doctors, Robert Terdiman, was indicted separately in New York State court for conspiracy and criminal narcotic sales, authorities said, after he wrote eight oxycodone prescriptions for undercover officers during the investigation.

He conducted no physical examination, and would prescribe oxycodone no matter what response the officers gave to his cursory questions, authorities said.

On weekday mornings, as many as 100 people would crowd the doors of Astramed's main location, clamoring to see doctors who would prescribe large quantities of the powerful narcotic painkiller in exchange for cash, according to the New York City Office of Special Narcotics Prosecutor Bridget Brennan.

Astramed describes itself on its website as a primary care clinic offering services ranging from sonograms and weight management and echocardiograms, but prosecutors described it as a pain management clinic.

PILLS A GROWING THREAT

Abuse of opiate pain killers such as oxycodone, morphine and fentanyl is a rising concern in the United States. Problems with abuse prompted the U.S. Food and Drug Administration last year to propose stronger safety labels on some long-acting opiods.

The death of actor Philip Seymour Hoffman on Sunday from an apparent heroin overdose has drawn further attention to the drug. An autopsy of his body was inconclusive, the New York City Medical Examiners Office said on Wednesday.

The investigation into the Astramed clinic arose from a two-year probe of the one of the doctors by Brennan's office, and grew to include federal prosecutors, New York City police and the U.S. Drug Enforcement Administration.

One law enforcement source involved in the investigation called the operation "one of the largest pill mills in the Northeast."

Doctors at Astramed wrote more than 31,500 prescriptions for oxycodone to high-level drug traffickers, who paid the clinic's employees up to $300 for each phony patient's appointment, according to officials.

Attorneys for most defendants could not immediately be reached, and attempts to contact Terdiman and Lowe at home were unsuccessful.

Officials said the accused drug traffickers would routinely intimidate the doctors, and in one case, threatened a doctor at gunpoint for not writing more prescriptions per day for patients sent in by the suspected ringleaders, officials said.